Las Vegas homebuilders’ sales keep falling

Southern Nevada’s home construction market kept slowing in July, a new report shows, as builders locally and nationally notch fewer sales.

Builders closed 802 home sales in the Las Vegas area in July, down 23 percent from the same month last year, according to Las Vegas-based Home Builders Research.

The median closing price, $519,975, was up 7 percent from a year earlier.

After a buyer signs a sales contract with a builder, it can take several months before construction of the house is finished and the sale closes.

Amid the drop in sales totals, builders have drastically scaled back their construction plans, pulling 804 building permits in July, down 39 percent from a year earlier.

Homebuilders’ sales totals have been sliding this year as would-be buyers face high borrowing costs and other economic headwinds, and as increased inventory on the resale market gives house hunters more options.

All told, the data seems to point to a shrunken pool of prospective buyers who are willing or able to buy increasingly expensive newly built homes in Southern Nevada.

Buyers sidelined

Locally, builders closed around 5,960 home sales this year through July, down 15 percent from the same seven-month stretch last year, and pulled nearly 6,360 building permits, down 24 percent, Home Builders Research reported.

The firm also noted that builders keep slowly raising their base asking prices.

Home Builders Research President Andrew Smith recently said that construction costs are not going down, so the cost of buying a house will not slide either, regardless of whether builders are selling more or fewer homes than they did a year ago.

Nationally, the sales pace in July for new single-family houses fell 8.2 percent from the same month last year, federal officials recently reported.

Jing Fu, senior director of forecasting and analysis with the National Association of Home Builders, recently said that affordability challenges “continue to sideline many prospective home buyers.”

The association reported Tuesday that single-family home construction fell in nearly every geographic region during the second quarter, saying this signaled a soft housing market.

Resale market cooling

In Southern Nevada, resale totals also are falling amid high prices.

Buyers picked up around 2,020 previously owned single-family houses in Southern Nevada in July, down 5.8 percent from the same month last year, according to trade association Las Vegas Realtors.

The median sales price in July, $485,000, matched the previously set all-time high and was up 1 percent from a year earlier.

Meanwhile, nearly 7,150 houses were on the market without offers at the end of July, up 54.2 percent from a year earlier, the association reported.

LVR President George Kypreos said in a news release last month that more homes to choose from is good news for buyers but is also a sign that the market “has been cooling down lately.”

Overall, Las Vegas’ housing market is cooling the fastest in the country among major metro areas, listing site Redfin reported last month, citing Southern Nevada’s drop in sales and sharp rise in available inventory.

“Buyers have more inventory to choose from than they’ve had in years, so they feel like they can take their time,” Cherra Bergman, a Redfin agent in Las Vegas, said in the report. “Even when they find a home they really like, they often wait to find something better.”

And while builders’ overall sales volume is sliding too, Bergman cited a key tool they can use to draw buyers: incentives.

She said in the report that house hunters are cost-conscious because of the high mortgage rates and that many of them are opting for newly built homes, as local builders are offering mortgage-rate buydowns and money toward closing costs “to offload inventory.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.